Second up but far less expected was Osborne’s announcement that the income limit on capped drawdown arrangements will be increased from 100% to 120%, restoring the 20% uplift.Those in capped drawdown will now be able to take income at 120% of GAD rather than 100%.
Before 2010 reforms took effect individuals could take 120% of the income level set by GAD. This was reduced to 100% in order to prevent investors from depleting their savings too quickly.
In November New Model Adviser® revealed the government was considering relaxing the GAD limits in the Autumn Statement.
Andy Bell (pictured), chief executive of platform provider AJ Bell who led a campaign to restore the 20% uplift, welcomed the measure.
‘Pension savers have spoken and the government has heard,’ he said. ‘This welcome news will hopefully be the start and not the end of a journey towards income drawdown rules that are fair, simple and sustainable.’